Top Vatican Bank Officials Resign

Ernst von Freyberg, president of the Vatican Bank Institute for Works of Religion, or IOR, talks with The Associated Press during an interview June 10 at his office in Vatican City. He was named the bank's interim director on Monday after the director and the deputy director both resigned.

Domenico Stinellis
/ AP

Originally published on July 1, 2013 6:42 pm

Two top officials of the Vatican bank resigned Monday just days following the arrest of a senior cleric with ties to the institution after police caught him with the equivalent of about $26 million in cash that they say he was trying to bring into Italy from Switzerland.

Paolo Cipriani, the bank's director, and his deputy, Massimo Tulli, stepped down, the Vatican said in a statement [h/t National Catholic Reporter]. Ernst von Freyberg, the bank's president, will take over as interim director general.

The resignations are the latest blow to the Vatican bank, which has been plagued by concerns it is used as an offshore tax haven. Last week Monsignor Nunzio Scarano, 61, who was already under investigation for money laundering, was arrested along with two other men.

"In addition to his Rome arrest, Scarano is also under investigation in the southern city of Salerno for alleged money-laundering stemming from a 560,000 euro cash withdrawal he made from his IOR charity account in 2009. Sica, the attorney, has said Scarano arranged complicated transactions with dozens of other people and eventually used the money to pay off a mortgage."

Reuters reports: "News of the resignation of two of the top managers at the Vatican bank, known formally as the Institute for Works of Religion (IOR), comes only days after Pope Francis set up a special commission of inquiry to get to grips with the bank's longstanding problems."

Francis has made cleaning up the financial scandals at the bank one of his top priorities.

As NPR's Sylvia Poggioli reported last year, infighting over the bank's compliance with international money-laundering regulations were part of the so-called Vatileaks scandal. As Sylvia noted:

"A television show in late January [2012] on an independent network first revealed letters addressed last year to [then] Pope Benedict XVI from the then-deputy governor of Vatican City, Archbishop Carlo Maria Vigano.

"Vigano complained of corruption within the church and protested orders to remove him from his post and send him to be the papal nuncio, or ambassador, to Washington.

"Under Vigano's watch, the Holy See balance sheet went from $10 million in the red to almost $45 million in the black in just 12 months.

"By being kicked upstairs, Vigano wrote, his efforts to clean up the Vatican would be stopped and would also tarnish the pontiff's image by bringing into question his resolve to establish transparency inside the Vatican."